‘Pakistan Will Achieve Its True Potential’

In conversation with Nadeem Hussain, founder of Tameer Bank.

Founded a decade ago, Tameer Micro Finance Bank Limited was Pakistan’s first scheduled microfinance lender. Today, Tameer has over 165 customer touchpoints and offers a wide range of services, including mobile banking and health insurance. With Telenor Pakistan as its majority shareholder, Tameer has a network of more than 64,000 agents as part of the Easypaisa program, Pakistan’s largest cellphone-based banking operation. We recently spoke with Nadeem Hussain, founder and president of Tameer, about his microfinance experience in Pakistan and his take on the sector’s future. Excerpts:

What has the Tameer experience been like so far?

Tameer has led Pakistan’s microfinance sector in profitability. We’ve had tremendous growth in our top and bottom lines over the last five years. But it’s not just about better numbers. It’s equally important to grow our influence in our target market and ensure we’re positively impacting the lives of our customers. So far this year, we’ve disbursed over $125 million in loans for agriculture, commerce, and services. Our branchless-banking business, Easypaisa, Pakistan’s largest and most vast mobile financial services solution, added more than 7 million customers in the first nine months of the year. We serve nearly 1.5 million beneficiaries of various government initiatives, including the Benazir Income Support Program. Tameer’s vision is to improve lives in every home, and we remain focused on doing exactly that. As Pakistan’s leading microfinance bank, we want to spearhead the effort to increase the microfinance borrower base from 3.5 million to 10 million in the next five years.

What’s your take on the federal government’s decision to impose a 0.3 percent tax on all bank transactions?

This has already affected transaction volumes, which have gone down. It is understandable why the government has imposed this tax, but it needs careful review. This tax will force people to revert to cash transactions and opt out of the formal banking sector. We need an enabling environment for financial transactions in Pakistan to increase the number of banked individuals and businesses in the country. We also need to focus on developing strong, transparent systems to bring more people into the tax net.

Will the devaluation of the yuan help or hurt Pakistan’s financial sector?

The Chinese currency devaluation will certainly impact our financial services sector. We will see greater demand for credit to fund trade with Chinese companies. In turn, this will put downward pressure on the rupee and may contribute to inflation in the medium-term. Microfinance is a small portion of the financial services industry and smaller banks with liquidity issues will be impacted more than banks like ours.

Other telecom companies have also started branchless-banking operations. How do you see the competition?

Branchless banking and mobile financial services are the future of banking—not just in Pakistan, but globally. Easypaisa is the largest mobile financial services provider in Pakistan and welcomes competition, which will only help develop a sustainable ecosystem and increase the size of the market. Easypaisa and other mobile financial services providers are catalysts that Pakistan needs to provide the unbanked majority of Pakistanis access to financial services.

How does microfinance contribute toward socioeconomic development in Pakistan and what growth opportunities do you see?

The real growth opportunity is at the bottom of the pyramid. Globally, this opportunity is projected to be worth $15 trillion by 2025. Pakistan is rightly positioned to take advantage of this by helping provide need-based financial services to people. There are nearly 40 million people at the base of the pyramid here who will need financial services to pay for health care, education, energy, food, and shelter. Microfinance and branchless banking are the right formula for greater financial inclusion.

What’s the scale of Tameer’s operational footprint?

We have a national footprint, from Gwadar to Muzaffarabad. Our 165-plus customer touchpoints serve a clientele of nearly 300,000 people in 57 districts of Pakistan. We also have over 64,000 Easypaisa agents across the country. Our expansion plan includes more Easypaisa shops to ensure easy, convenient, and timely access to financial services.

Do you remain optimistic about Pakistan’s economic prospects?

I started Tameer 10 years ago with the belief that Pakistan is on the verge of taking off. I maintain that even today. Analysts are bullish on Pakistan and so are business leaders around the world. We are blessed with fertile lands, a variety of natural resources, diverse cultures, and most of all a vibrant and burgeoning youth population. All we need is a good plan and the will to execute it. Pakistan can and will achieve its true potential.